30th Dec 2013 13:27
LONDON (Alliance News) - Britain's biggest supermarket chain Tesco PLC Monday said it has been given clearance by India's foreign investment regulator to invest USD110 million into a joint venture with Trent Hypermarket Ltd, the retail arm of Indian conglomerate Tata Group.
Earlier this month, the UK supermarket giant with a strong international presence announced that it had filed an application with India's Foreign Investment Promotion Board to invest around USD110 million to create the 50-50 joint partnership.
The regulatory approval paves the way for the supermarket giant to venture into another one of Asia's largest economies, after India liberalised its rules governing foreign investment into the retail sector in September last year.
The supermarket chain offloaded its ailing Japanese operations in 2012 to rival chain Aeon in a GBP40 million deal, but in China, Asia's biggest economy, it injecting GBP345 million into a joint venture with state-owned China Resources Enterprise, to combine their Chinese retail operations.
The new joint venture with Tata follows on from a wholesale and franchise agreement that Tesco signed with the Indian group back in 2008. It currently supplies around 80% of the goods in Tata?s 16 Star Bazaar and Star Daily stores.
Tesco said that the joint venture will build on Tata's existing store format in southern and western India, by operating under the names Star Daily and Star Bazaar, although it did not say how many stores it is looking to open.
?Tesco is pleased that the FIPB has agreed to our proposal. This will now allow us to work on the practicalities of setting up the joint venture with Trent. Any such announcement will be made in the usual way,? a Tesco spokesperson said.
Shares in Tesco were trading 1.3% lower Monday afternoon, at 335.55 pence per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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